When going over my Tax Return with my accountant, he asked why I only worked so few hours that year?
Of course, I argued that I typically worked 40 plus hours a week so something was wrong somewhere.
His point was that I didn't bill 40 hours a week at my full rate!
So I reviewed my year. I had spent a lot of that year focusing on networking to expand my business and I had a few clients that were distracting me from my core business, and I spent a good deal of time researching for either my own projects or those of my clients. But had I really worked so few hours.
It was a slap around the head!
I was giving away the store! Doing small jobs for clients but not billing them -- "he's a good client, this will only take a few minutes", and some jobs were longer but I really was not tracking the time I spent on task.
Now to give you a clue as to the cost of giving away the store like this consider these numbers.
Giving away 1 hour a day is approximate 250 hours a year and at $125 an hour that's $31,250. My accountant was right! I really was giving away the store, because it was much worse than that!
I needed a solution, and that's what prompted me to start building my own Work sheet management system. After using various timer programs that resided on my PC I concluded that I could build a better product.
Ever since I have been tracking the time I work for my clients, my productivity has improved in a big way. But it took a habit change!
Now before I start on a project, I start the worksheet program and and keep track of what I do. It automatically tracks my time.
The odd part about it is that there has been absolutly no hassle from my clients. In fact one client summed it up pretty simply... "Paul, If you go out of business because you fail to bill me for the work you do, then I'll not have you to support my business and that will hurt me too!"
So the moral of this story is simple! If you bill your clients by the hour, then bill them! Accurately! and on time! Your cash flow will improve, your relationships with your clients will improve (they know you'll invoice them and they won't waste your time) and your stress levels will drop.